Low Florida Mortgage Demand, Rising Expenses Hurt Daytona Beach Developer
A Florida real estate developer was dragged into the negative numbers in the first quarter by expenses from stock options, impact fee credits and donated land, the News-Journal reports.
Several managers of Consolidated-Tomoka Land Co. took advantage of their stock options in the quarter, exercising them to sell or hold, said Bruce Teeters, the company’s CFO.
The company also sold a large amount of impact fee credits for a Florida Hospital on Williamson Boulevard and donated land valued at about $1.5 million to the Volusia County school system.
Total revenue at about $8.6 million was actually up from about $8.4 million in the first quarter of 2006. The net loss was $583,812, compared to a profit of about $2.13 million last year.
While income from the company’s investment properties helps keep revenue up, the lack of Florida mortgage demand and subsequent real estate sales also added to the dismal quarter.
The outlook is good for the rest of the year, however, said the company’s president, Bill McMunn, in a news release.
“New contract activity… continue to reflect a healthy commercial real estate market despite the continuing weak Florida housing market.”
Even as Florida mortgage loan demand has waned, the company has been using its profits from selling real estate to invest in rental properties.
It hasn’t bought anything since a $15 million deal to acquire buildings housing a Best Buy and Dick’s Sporting Goods in Atlanta last year.
The company has $10 million available, but Teeters said the prices for local commercial real estate has risen too high.
Action on the land the developer has sold or is panning on selling has remained brisk. Some of the biggest projects are Parker Boats in the Interstate Commerce Park and Center Point Business Center.
Site work also has started at the northeast corner of LPGA and Williamson for two lots. The company has gotten interest from several buyers, but an executive decline to name any.
SOURCE: Daytona Beach News-Journal
